Saturday, 29 October 2016

Textile Ministry Supports Free Trade Agreement with EU

The Indian
textile ministry sees the Free Trade Agreement (FTA) with the European Union
(EU) as one of the most promising measures to boost exports. It is for this
reason that it is in talks with the Commerce Ministry to urge the closing of
this agreement. It is speculated that once the FTA is implemented, it will help
increase the export of fabrics ,garments as well as Home textiles and will help
in dealing with the increasing competition with Bangladesh & China. This,
teamed with China’s downtrend in export growth will help India regain or improve
its original position in the arena of textile exports.

Textiles
Secretary, Ms. Rashmi Verma confirmed the news and said, that the ministry
wishes for the Commerce Ministry to seek the implementations of the FTA with
EU. Apart from the textile industry this move will also help in boosting the
overall international trade from India.

Present at
theCII’s textiles and apparel conference, Ms. Verma further added the fact that
India has an edge over Bangladesh & China with respect to environmental
compliances, an aspect which holds a significant importance in most of the
deals closed by EU. This will help India overcome Bangladesh’s advantage of tax
benefits and preferential treatment for exports. She said that, given China’s
current position of decreasing export growth of textiles, the FTA is likely to
put India at an advantage, given the cost advantage. This will in turn help
India establish a stronghold in the international textile trade.

At present
Bangladesh, Ethiopia and Kenya enjoy a duty free access in the EU, whereas
exports from India attract a duty as heavy as 9.5%. In a bid to offset this
limitation, the government is also in talks regarding a proposal which will
offer access to automobiles and wine imports from EU in lieu of free access to
Indian Textiles.

The negotiations
regarding the FTA reached a moot point approximately two years back due to
certain disagreements on duty cuts on automobiles, however the Commerce
Ministry is all set to re-initiate the talks anytime soon!